Five emergency physician groups in New York are for underpaying them for out-of-network medical services.
The emergency doctor groups allege that UnitedHealth worked with cost-management company MultiPlan to create a database of fake reimbursement rates for out-of-network providers. The companies allegedly used MultiPlan's Data iSight software to fabricate "reasonable rates" for emergency services, and justify underpaying out-of-network clinicians.
The companies withheld billions of dollars from providers, according to the complaint.
Under New York state law, making sure that physicians get paid at the reasonable, usual, and customary rate is "essential," the complaint stated, as out-of-network emergency providers in New York are barred from balance-billing (a.k.a. "surprise billing") their patients.
"United and MultiPlan are brazenly defrauding the emergency room doctor heroes of New York State who risk their lives every day to save patients stricken by COVID-19," said Matt Lavin, JD, the attorney representing the physician groups.
"Our clients were left with no alternative but to seek justice in the courts for themselves and to bring this illegal scheme that affects tens of thousands of other emergency medical providers to light," he added in a statement to 番茄社区app.
UnitedHealthcare stated that the lawsuit was "meritless," and that it plans to "aggressively defend" itself against these "baseless claims."
"A small number of providers ... are driving up the cost of care for the people and customers we serve," a UnitedHealth spokesperson said in a statement. The spokesperson added that some provider groups that are out-of-network charge 700% to 900% of Medicare rates for services they provide.
"This sort of excessive pricing from out-of-network providers contributes to skyrocketing health care costs for everyone," the UnitedHealth statement continued, adding that this lawsuit attempts to challenge its efforts "to address the unreasonable and anti-competitive rates" charged by providers.
The five physician groups involved are Emergency Physician Services of New York, Buffalo Emergency Associates, Exigence Medical of Binghamton, Exigence Medical of Jamestown, and Emergency Care Services of New York. They sued UnitedHealth and MultiPlan for racketeering, claiming that the companies conspired and created an enterprise to underpay them.
According to the complaint, UnitedHealth provided "target rates" for MultiPlan to achieve in exchange for higher payouts, incentivizing the company to calculate the lowest possible reimbursement rates. MultiPlan designed and implemented their Data iSight software using purposely faulty data, the doctors alleged.
The current lawsuit follows similar allegations made against UnitedHealth nearly a decade ago, claiming the insurer used an in-house database, Ingenix, to fraudulently determine usual and customary fees paid to providers. An investigation conducted in New York state found that the database understated physician payments by as much as 28% in some regions.
After New York state investigators accused UnitedHealth of fudging Ingenix data to underpay providers, the insurer settled the charges, paying $50 million to fund non-profit claims database FAIR Health, which compiles data on reimbursement rates. UnitedHealth was required to use FAIR Health to determine out-of-network reimbursements until 2015, when it allegedly began creating an enterprise with MultiPlan.
In a phone interview, Lavin told 番茄社区app that the current lawsuit against United is for the exact same fraud as the Ingenix case, except the insurer used a third party to manufacture data instead of its own subsidiary.
"My clients are excited to be in front of a judge to put an end to this fraudulent practice," Lavin said. "It's affecting them, and countless other providers across the country."